DAMMAM: There is no way to satisfy consumers except through cooperative societies: This is the opinion of about 98 percent of Saudi youths who were interviewed by a local Arabic newspaper about the role being played by such societies in the life of residents in some cities in the Kingdom.
These young men gave many reasons to justify their viewpoints. Most significant among them is that these societies make available consumer goods at reasonable prices in addition to profits of their joint venture. Only two percent of those interviewed by Al-Riyadh newspaper see no significant role for such associations in society.
Several social experts and economists also underscored the significance of such societies in ensuring mutual benefit of its members as well as the weaker sections of society. They also expressed surprise over the absence of such societies in most urban districts across the Kingdom. The number of cooperative societies in the Kingdom does not exceed 200, according to press reports.
A cooperative society is an organization owned and operated by a group of individuals for their mutual benefit. It is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly owned and democratically controlled enterprises. A cooperative may also be defined as a business owned and controlled equally by people who use its services or by the people who work there.
Fuad Al-Moshaikhes, a social researcher, said that cooperative societies are instrumental in realizing a number of lofty goals. Spelling out the salient features of such societies, he observed: "These societies help in circulating the private wealth of a locality in an effective and fruitful way. The buying and selling also help address several social problems of the area concerned. These enterprises enable their shareholders to realize profit in addition to attracting people into such ventures due to its charity potential. The wealth of an individual and the profits of the organization rotate among members of the society and thus help a Muslim member get reward from God."
According to Al-Moshaikhes, cooperative societies have several advantages comparing to other associations or schemes. Most important among them is that they can make available of commodities at competitive prices to both its registered members and nonregistered members of the community. "The poor and needy families represent an important part of its economic equation without affecting the profits of shareholders. It also ensures guarantee to consumers. A part of its revenues goes to the poor and thus enables them to lead a normal life like all other members of the society," he said. According to economists and social scientists, the success of cooperative societies could be compared with that of leading hypermarkets run by prominent businessmen.
"Investors in such societies are also able to earn huge revenues from their cooperative stores. These societies distribute profits among their shareholders in addition to giving a humanitarian touch through implementing various social service schemes and projects through their funding," he said.
Prominent economist Muhammad Dulaim Al-Qahtani noted that the first cooperative society in Saudi Arabia was founded in 1962 in Diri'ya, near Riyadh. He stressed the need for setting up of cooperative societies in each and every district of cities across the Kingdom in a way that they serve the residents and the national economy as well. "By making contributions as shareholders of cooperative societies, the citizens can earn profit on the one hand and take part in implementing charity social schemes that are beneficial to their locality as a whole on the other. These societies distribute dividend among the members once in every six month or in a year," he said while urging the branch municipalities to allot plots of land to support these societies to set up their projects in urban districts.
He also noted that the cooperative societies continue to play a vital role in helping individuals and institutions as well as in making positive changes in cooperative charitable work. Al-Qahtani also referred to the challenges posed by some foreign workers by exercising control over the foodstuffs market by forming cooperative groups by themselves. "Through this, these foreigners managed to play a vital role in controlling market conditions either through increasing or decreasing prices of goods at their own will," he said while calling for putting an end to such dubious practices through effective market interventions by the concerned authorities.
Al-Qahtani said the cooperative societies would strengthen social integration in each urban district. "Members of the society will have frequent interactions and consultations. This would bring about positive results such as the growth and development of the districts as well as in uplifting the living standard of the poor and needy families, besides protecting small investors and consumers as well," he noted.
Al-Qahtani also drew attention to the success stories scored by cooperative societies in other GCC states, especially UAE and Kuwait. "These GCC experiments tell us that these would never become an economic failure," he added.
On his part, Najeeb Al-Saihati, member of a cooperative society, said that formation of such societies would help everybody in society to live with dignity. Echoing the same view of Al-Qahtani, he urged city residents to form cooperative society in each district. "The public can take advantage of these societies which make available reasonably-priced commodities in addition to supporting the poor families with a special discount. They can follow the example of the cooperative societies that have been functioning effectively in the cities of Qateef and Safwa for nearly 20 years," he said while noting that there is a cooperative society in the region that contributed about SR250,000 for charity projects in addition to distribution of dividend among the shareholders.
Murad Al-Humeidi, chairman of the board of directors of the cooperative society in Saihat city, said that the society is now in its third phase of licensing procedures. There are 2,124 members in the society, which has a capital of SR14.6 million, he said.
"This experiment would not incur huge losses as in the cases of some individual projects because here the shareholders themselves are the customers. These shareholders, who belong to the same district or city, are keen to ensure the project a great success in terms of commercial, humanitarian and social aspects," he added.
© Arab News 2011
